On the evolutionary continuum of server side technologies, virtualization obviously stands out as the next macro-trend up for widespread adoption. But that alone isn’t what persuades corporate decision makers to make room in the capital expenditures column for large IT platform migrations.

Leading-edge concepts and technologies are frightening to many executives: Risk of a botched implementation or miscalculation of projected benefits is high; rewards of a successful transition can be difficult to trace and measure. Meanwhile, there’s always the comfort of knowing that if the technology is in fact the real deal, it will continue getting cheaper and richer with features over time (a la Moore’s Law, even as competitive advantage vanishes with increasing adoption rates).

In Data Center Decisions 2008 Purchasing Intentions survey of 600 IT professionals, 61% said they already use some form of virtualization in their organization. Another 29% plan to test, evaluate or deploy it this year. And a mere 10% reported no plans for virtualization. Meanwhile, IDC predicts 2009-2010 will see the tipping point of logical virtualized servers for the first time outnumbering physical, non-virtualized units.

That suggests plenty of market opportunity for virtualization solution vendors if they can successfully address the pain and pleasure points of those responsible for evaluating strategic purchases.

So just what is it that triggers companies to break away from institutional orthodoxy and embrace unfamiliar systems? For instance, while virtualization has gained solid traction, enough difficulties around performance management, capacity planning and troubleshooting remain to give even some IT shops pause.

Paul J.H. Schoemaker, research director for the Mack Center for Technological Innovation at The Wharton School of the University of Pennsylvania, says traditional valuation and return on investment (ROI) models have their place. But reaping the biggest competitive advantage from technology will always require moving before a technology is proven “safe.”

“Since true innovation entails uncertainty, as opposed to quantifiable risk, there will always be an element of vision, entrepreneurship and faith involved,” says Schoemaker, who has authored and co-authored several books and research papers on managing business risk.

“The C-suite recognizes that business is about taking risks and that not everything can be analytically proved or supported when venturing into the unknown. Too often companies focus on incremental innovation – since it is more predictable and less disruptive. But the largest gains in business come from more daring innovations that challenge the paradigm and challenge the organization.” 

In saying “no” to projects that may seem worthy to technologists, managers with budgetary discretion are seeking to minimize downside risk.

“[One] risk is that the market does not reward the initiatives at first, especially if it is already skeptical about the company’s strategy or the caliber of its management team,” Schoemaker notes.